Nick Snow
Washington Correspondent
WASHINGTON, DC, June 8 -- Voting largely along party lines, the US House passed a bill June 7 designed to facilitate refinery permit processing by a 238-179 vote. It now goes to the Senate, where its prospects aren't certain.
Republicans said that HR 5254, the Refinery Permit Process Schedule Act, would reduce the time to obtain environmental and other approvals to expand existing plants and build new ones without compromising community protections.
Democrats charged that it actually usurps state and local regulatory authority by appointing a federal official to coordinate the permitting process, and by requiring the US president to select three closed military bases as possible sites for new refineries.
Democrats also objected to the bill's coming to the floor under a procedure that barred amendments, including their alternative proposal to create a federal strategic refining reserve similar to the one that currently buys and stores crude oil.
"It tramples state environmental laws without ensuring new refineries will be built. By contrast, our Democratic alternative would extend the successful Strategic Petroleum Reserve model to refining," said Rep. Rick Boucher (D-Va.), who led the floor debate in opposition to the bill.
Energy and Commerce Committee Chairman Joe Barton (R-Tex.) responded that Democrats failed to provide enough details about how a strategic refining reserve would be structured to warrant its consideration as an alternative to HR 5254.
"The procedure to bring this bill to the floor has not been what I would have liked. I agree with my friends on the minority side on that point. But we on the majority side felt we needed to do something about this country's refining capacity because it's influencing oil product prices," he said.
Arizonan's perspective
"If anything, I wish the bill went farther," said Rep. John B. Shadegg (R-Ariz.), in whose home state the single existing new US refinery has been proposed.
"One year ago, I visited the New York Mercantile Exchange, Shadegg continued. "The traders on the floor there said the exact opposite of what we just heard on the floor of this House. They said that this nation is in desperate need of refining capacity. They grabbed me by the lapel on the NYMEX floor and said, 'Do what you can to get additional refining capacity in this country.'"
Rep. John D. Dingell (D-Mich.), the Energy and Commerce Committee's chief minority member, said that no new domestic refineries have been built since 1976 because major oil companies have not been interested. "The harsh fact is that they made a judgment that they can make more money elsewhere, and that's how it should be," he said.
Referring to the Arizona Clean Fuels Project, he added, "Only one new refinery project has sought a clean air permit in the last 30 years. It got the permit—twice—but it hasn't got the investors. The sponsors of this bill should explain that."
Dingell also noted that when the committee's minority staff asked state and local regulators about refinery expansion air quality permit applications they had received, the regulators said that most had been approved within a year.
Republicans said the survey was incomplete because it did not receive responses from regulators in California and Texas, which have a significant number of US refineries. They also said that the Arizona refinery project spent nearly 6 years getting permits and is still awaiting US Bureau of Reclamation approval to build on land near Yuma.
"There were 37 permits and authorizations required. This bill wouldn't repeal any of them, but would make them occur simultaneously instead of sequentially," said Rep. Charles F. Bass (R-NH), the bill's author.
Both biofuel and oil
Bass said that the bill also encourages diversity because it addresses construction of biofuel as well as refineries outside the US Gulf Coast.
"Our agricultural and forestry resources are currently sufficient to sustainably displace more than one third of our transportation fuel needs, and we should support domestic supply over protecting the import-dependent status quo," Bass said after HR 5254's passage.
But Rep. Tom Allen (D-Maine) warned that the bill not only would change refinery permit provisions in the 2005 energy policy act but also would override local redevelopment agencies established by the military base realignment and closure commission.
"There is nothing that is an obstacle to building a refinery. This bill says the president will order a refinery to be built but the defense secretary will carry it out," he said.
Republicans responded that the bill would not impose a refinery on any community that doesn't want one. "It requires only 3 RDAs to consider siting a refinery on a closed military base. They don't have to accept it," said Rep. Ralph M. Hall (R-Tex.), chairman of the Energy and Commerce Committee's energy and air quality subcommittee.
Bass said that he never created Section 5 of the bill, which covers presidential selection of three closed military bases as possible new refinery sites, with the intention of forcing an oil processing plant on a community. The Association of Defense Communities supports the provision, he added.
"It's the clear intent of this legislation to allow any community that does not want a refinery to opt out of the process," Barton noted.
Contact Nick Snow at [email protected].